LIC & LIT How will LICs manage BHP buyback

I see in the Exchange Trade Fund thread a couple of references about how VAS will deal with the BHP byback.

How quickly people forget! Most of the big LIC's hold that company. It could get interesting with the next LIC reporting sesson depending when BHP does it's thing. I'll wait until I see in my email the dividend statement is available what impact it has.

 

Are you suggesting the big LICs are more weighted to BHP than VAS? I presume a special dividend from LICs may be on the horizon all else being equal by then...

 

Hi @Pleep, not sure how that inference was drawn from my post. I don't know the shareholdings of VAS - don't own it and don't know how to find out the number of shares it has in the relevant companies.

I'm assuming as a passive index fund it holds according to the index weightings of the shares in the ASX 300. If so, then as the BHP buy back is, I understand, an off-market buy back. So I'm assuming, and I stand to be corrected, it's going to require an active decision by share holders. That active nature would not seem to apply to the passive nature of VAS. Any special dividends would be passed on as part of the quarterly distribution.

For LICs however the managers can decide to participate in the off-market buy back. That's all I was getting at.

Just as importantly this little number dropped into my email on Friday (complete with an roll of eyes emoji) but I've only just read it. Probably in the wrong thread but that's how it goes.

"From 1 November 2018, the following Vanguard EFTs will be eligible to participate in The Vanguard Group Inc's existing global securities lending program."

Short selling is another name for it. The list is too extensive for me (lazy) to type but includes VAS and VGS. Ah, passive, semi-passive, semi-active, active. All getting convoluted n this modern age.

 

Yes clearly I jumped to some sort of conclusion there, but I appreciate your response. Presume ETF’s won’t participate and will adjust their portfolio weighting as normal after the event - just a guess.

 

The elegance of LICs and ETFs. Allow others to do the work so you can stop worrying (caring?). No need to concern about Gann, candlesticks, moving averages or other arcane matters. Decide your preferred asset allocation then go and do more interesting things.

Thanks PIC for Friday's contribution.